Gutter Opportunities: Commercial production

Installing gutters on some commercial buildings — perhaps the occasional restaurant, medical suite, branch bank or convenience store — does not differ greatly from residential jobs. But to perform commercial projects that bring in higher dollar volumes — a warehouse, an office building, a strip mall, an apartment complex, perhaps a school or library — requires a very different approach to the gutter business than the model followed by residential installers.

The differences are both economic and logistic, reports co-owner Kevin Booth at Gutter Helmet of North Florida. Based in Jacksonville, the company installs seamless gutter systems and gutter protection primarily for residential customers. “We don’t advertise for commercial work,” he affirms. “It’s more profitable to do 15 or 20 residential jobs in the time it takes to do a commercial project.”

Gutter Helmet of Florida photo

When the company performs a commercial project, Booth explains, “Usually it’s because we have some previous connection with the owner, or because an existing customer has referred us. Also, because the Gutter Helmet name is so well known, we sometimes get calls from apartment complexes that need gutter work.”

When Gutter Helmet of North Florida receives such contacts, Booth will quote the jobs as a courtesy to existing customers or to protect his brand. Thus, his company has installed gutter systems and gutter protection “mostly for commercial metal buildings and sometimes office buildings and apartment complexes,” he relates.

“The profit margins for commercial jobs are lower than for residential,” Booth attests, “because you’ve got to rent a lift and because you spend more time on the job.” Still, Gutter Helmet of North Florida has its limits. If the economics simply do not work, Booth may need to pass. An apartment complex, for example, can “easily need 20,000 linear feet of gutter—which our company just isn’t set up to do,” he states. “Also, many complexes ask for a quote but then don’t have the budget for such an extensive project.”

Gutter Helmet of Florida photo

Given his gutter experience, Booth says commercial jobs are easy enough to design. On the one hand, because commercial structures are larger than homes, their roofs have larger surface areas and drain more water. “It’s still just a matter of calculating water flow,” Booth says. “Then after that, we can decide on the spacing of the support brackets on our experience and on how the gutters are attached to the roof.”

Then, too, Gutter Helmet of North Florida owns a New Tech Machinery gutter machine and can run seamless gutters for its commercial projects just as for residential jobs. That level of familiarity with the gutter systems, honed on residential roofs, makes the occasional commercial job easier to calculate and design. Booth reports his company installs gutter systems on commercial buildings perhaps four times a year and gutter protection about 10 times.

But to actually do the installation requires some planning. “The biggest challenge with commercial work is access to the building,” Booth relates. Issues may include the availability of parking in relation to the building, the height of the structure and the tree cover. And whenever work must be performed at heights above eight feet, crew members use ladder standoffs and safety harnesses.

Along with the economic and logistic reasons that Gutter Helmet of North Florida does not actively pursue commercial projects, Booth cites a third issue. “The question is a competitive one. If we went after commercial jobs,” he explains, “that would put us in a different ballgame and place us in competition with a different set of contractors who are set up for commercial work. We believe that we can best leverage our strengths in the residential market.”

Best of bothOne contractor set up for commercial gutter projects is Academy Roofing Inc. of Aurora, Colorado. “Gutters are a nice profit center for us,” reports president Curt Boyd. In 2012, he and wife Suzie Boyd mark 30 years together in the gutter and roofing business. Today their company employs 20 crews that provide services for new construction projects and retrofit jobs, both commercial and residential, across the Denver metro area.

In contrast to Gutter Helmet of North Florida, the reason that commercial gutters make a tidy profit for Academy Roofing is because, explains Boyd, “We’re there to install the roof. So the gutters are part of the overall roofing project. That way, the economics for the gutters make a lot of sense.”

Academy Roofing photo

For one thing, since Academy is already marketing itself as a roofing contractor, then “it doesn’t require much additional marketing promote our gutter services,” adds Boyd. “Doing roofs and gutters is an easier sell because we can market ourselves as a convenient, one-stop shop for commercial building owners and managers.”

Interestingly, though, this business model is still relatively new for the 30-year-old company. Academy was founded by the Boyds in 1982 as a residential gutter installer. In time they expanded into residential roofing, only doing occasional commercial jobs by referral. But in 2005 when home construction in Denver began to slow, the Boyds decided to actively pursue commercial projects.

“Most surprising to me,” recounts Curt Boyd, “was the fact that we’d been in business nearly 25 years and were well known in residential roofing and gutters — but totally unknown by general contractors in commercial construction. So going into commercial roofing and gutters was almost like starting over. But we stuck with it and today our commercial projects comprise about 40 percent of our total volume.”

Seven years after entering the commercial market, Academy Roofing has “worked on nearly every type of commercial building you can imagine, although most of the work is light commercial rather than heavy/industrial,” relates Boyd. “One of our crews just finished a school project and is now working on a mixed-use development, while another crew is on a job for an apartment complex.”

Academy Roofing photo

According to Boyd, his company’s 20 crews generally include two or three that focus on gutter installation and another two or three that specialize in sheet metal applications. To keep up with its varied workload, Academy Roofing owns and operates a half-dozen gutter machines from Denver-based New Tech Machinery. Though only two or three machines are kept running full-time, the extra equipment is required for Academy to produce 5-inch, 6-inch, or 7-inch gutters as needed to accommodate both the residential and commercial markets.

Even if commercial gutters are profitable for his company, Boyd acknowledges the challenges of the work. “The skills needed to install commercial gutters are similar to residential gutters,” he advises. “But a commercial building is almost always bigger and taller than a house. And seldom do you have a lot of maneuvering room to both fabricate the gutters then get them to where the gutters need to be. Also, commercial gutters are often made of steel and are bigger, heavier and clumsier for crews to handle. You’ve got to be aggressive on safety — which we always are, whether the job is commercial or residential.”

Designing a commercial gutter system likewise has challenges that distinguish the work from residential applications. “Many times, you’ve got to move a high volume of water in a more restricted location,” reports Boyd. For example, a strip mall might only have pitched roofs on the fronts of the buildings so that water must be channeled in only one direction.

Moreover, commercial buildings owners desire a balance between function and form. The large surface area of the roof and consequent volume of water may dictate a certain number of downspouts for the system to function best. “As the installer, our highest priority is to install a system that works right,” notes Boyd. “But when you tell an owner that, say, five downspouts are needed, the owner might think that many would detract from the look of the building and reduce its value or rental potential. So you have to work things out.”

Sometimes the best location for a downspout may conflict with other necessary functions in a commercial building. “Even if the best place for a downspout is near the loading dock,” Boyd allows, “it’s a legitimate concern to point out that all the trucks going in and out could knock into the downspout — at which point, the downspout won’t do you any good. So, again, designing a commercial gutter can require you to balance a number of factors that aren’t issues for residential projects.”

Working in the installer’s favor is the concern of commercial building owners about liability. “Owners are conscientious,” Boyd avers. “They don’t want a badly designed or broken gutter system to cause a water slick or an ice slick that’s dangerous for tenants and customers — and exposes them to liability. They’ll work with you, if you’re willing to hear their concerns.”

Flat-out gutteringAnother approach to commercial gutters is illustrated by the R. B. Crowther Company, a commercial roofing contractor based in Morris, Ill. Like Academy Roofing, the company installs commercial gutters as part of an overall roofing project. But Crowther’s work is different in two important respects. First, the company does not roll-form its own 7-inch steel gutters but instead buys them in up to 40-foot sections. Second, most Crowther gutters are installed on flat-roofed commercial buildings.

“We do only low-slope commercial roofing,” explains president Steve Anderson, “and have worked on multiple types of buildings, everything from schools to factories to strip malls. Most of our projects are re-roofing jobs, though we also do roofing for new construction.”

Either way, R. B. Crowther is usually installing roof and gutter systems according to an architect’s specifications. For that reason, Anderson continues, “We take the measurements and then give everything to our gutter supplier so they can engineer and fabricate the system.” The company is supplied by Advanced Architectural Sheet Metal of Chicago Heights, Ill.

Because R. B. Crowther sees itself as a roofing contractor and not a gutter specialist, adds Anderson, “Using a knowledgeable supplier makes things much easier for us.” For one thing, gutters can be fabricated with a flange that facilitates their installation on a flat roof. For another, a well-engineered gutter system is important “because a flat roof must be well drained in order to keep the roofing manufacturer’s warranty in place.”

Since manufacturers warrant the roof but not the gutters, then R. B. Crowther must warrant the gutters systems it installs. “Manufacturers usually warrant the roof for 20 years, so we add a 20-year warranty on the gutters,” relates Anderson. “That means we want the gutter system to be correctly engineered. Commercial building owners expect that any roof we install should last the service life of the building — and that the gutters should last as long as the roof.”

Though gutters are only a fraction of the total cost for a roofing project, R. B. Crowther does profit on them. “We don’t throw in gutters as a loss leader to get roofing jobs,” Anderson affirms. In fact, there may be less downward pressure on profit margins for gutters than for roofs. “Flat roofs are made from petroleum-based products like rubber,” he explains, “so that increases in steel prices over the years have not been as high as those for roofing materials.”

Forty-foot sections of 7-inch steel gutters are heavy and require a crane to be hoisted into place. Aggressive safety measures for the crews are a must. Yet Anderson appreciates that advances in roll-forming technology over the years have gutters easier to install. “Our supplier can run the lengths we need to order, so that our crews have fewer seams to deal with,” he says.

Commercial gutters may not be a panacea for installers looking to diversify. Most companies that specialize in seamless residential gutters would be better off serving more homeowners than expanding into the commercial market. Still, there can be times when the occasional referral makes a commercial project advisable — or when the economy creates an opportunity (or need) to leverage gutter experience into a roofing venture as well. If so, installers who consider commercial jobs have logistic, economic and competitive issues to weigh.